KYIV, March 21 - The Ukrainian cabinet will extend a contract with CEO of the nation's state-owned natural gas monopoly Naftogaz Andriy Kobolev for one year, Volodymyr Groysman said at a government meeting on Wednesday, bne IntelliNews reported.

The statement followed last week's proposal of the company's board to extend a contract with Kobolev for one year, until March 22, 2020, according to a letter signed by the board's head Clare Spottiswoode.

At the same time, the board has proposed to halve the current level of the company head's salary to UAH520,500 ($19,461) without paying monthly and quarterly bonuses.
However, Kobolev can claim for bonuses based on the results of work for 2019 if the nation's gas pipeline operator is created ready for certification, and gas production is increased by January 1, 2020.

Meanwhile, Groysman said that a tender to select members of the board of Naftogaz will take place on March 20, 2020.

The PM added that the extension of the contract with the current Naftogaz board for a year is an acceptable solution, taking into account agreements reached during consultations with the supervisory board regarding the reduction of salaries and bonuses of the board members and achieving certification of the gas transmission operator until January 1, 2020 year, as well as increasing the level of natural gas production.

On March 6, the Ukrainian government greenlighted a special resolution with the aim to appoint a new head to Naftogaz. The contract with Kobolev will expire on March 22 under a decision of the government in Kyiv.

Over the past years, Kobolev has won a reputation as a reform-minded manager among Western donors for his attempts to reform the monopoly. Under his leadership, Naftogaz also secured a victory in the Arbitration Institute of the Stockholm Chamber of Commerce over Russia's Gazprom.

According to the arbitration ruling, Gazprom should pay $4.63 billion to Naftogaz for the failure to meet gas transit obligations. However, since the court previously ordered Naftogaz to pay Gazprom for gas supply arrears in January, Gazprom's net payment after the two arbitration decisions will be $2.56 billion.

At the same time, Kobolev has been under fire for his multi-million bonuses. (in/ez)